Job Evaluation: An Introduction

The aim of job evaluation is to provide a systematic and consistent approach

to defining the relative worth of jobs within a workplace, single plant or
multiple site organisation. It is a process whereby jobs are placed in a rank
order according to overall demands placed upon the job holder. It therefore
provides a basis for a fair and orderly grading structure.

Job evaluation does not determine actual pay. That is a separate operation,
normally the subject of negotiation between management and employees or
their trade union representatives. Only the job is evaluated, not the person
doing it. It is a technique of job analysis, assessment and comparison and it
is concerned with the demands of the job, such as the experience and the
responsibility required to carry out the job. It is not concerned with the total
volume of work, the number of people required to do it, the scheduling of
work, or the ability of the job holder.

Several techniques of job evaluation have developed, varying in approach.

Some involve an examination of jobs according to criteria such as skill,
responsibility and working conditions. Others are less complex.

Why introduce job evaluation?

Key Points: –

ƒ It can be beneficial when the existing grading structure is in need of

review

ƒ It can help establish or maintain the credibility and acceptability of a

grading system

ƒ Job evaluation facilitates the accommodation of new or revised jobs

into the grading structure

ƒ It can be used by organisations as a basis for job matching and

external pay comparisons

In the past job evaluation has tended to be used more often for white collar,
rather than manual employees. However, there has been a steady increase in
the use of job evaluation for all types of jobs in the Cayman Islands. The
concern for unit labour costs makes it vitally important for organisations,

Copyright © 2003 Department of Employment Relations – Cayman Islands Government

operating in highly competitive markets, to ensure that the grading level of
their employees accurately reflects the relative importance of their jobs to
the organisation.

Properly introduced and maintained, job evaluation can help lay the
foundation of fair and orderly pay structures and thus improve relationships.
Job evaluation may therefore be appropriate in the circumstances.

Anomalies in the pay system/need for a pay structure

Job evaluation can help remove any anomalies or inequities in an

organisation’s payment system where the existing grading structure is
thought to place jobs in an arbitrary order with no justifiable or logical
reason. Job evaluation would help remedy this by providing a more
structured basis for deciding grading levels. However, job evaluation should
not be introduced if the main reason is unrelated to the basic grading
structure, for example because a bonus and incentive scheme has fallen into
disrepute.

Changes in the job content

Work restructuring within organisations may result in companies having

fewer manual employees often with a greater range of duties. In addition,
new ‘high tech’ machinery may have altered traditional roles and blurred the
differences between ‘operating’ and ‘craft’ skills. All this may have the
following effects on existing grading systems:

• they may not be able to cope with the introduction of new jobs or new
skills, with a likely increase in the number of grievances about grading

• they may not be able to cope with any ‘grade drift’, with lower grades
having less to do, while other jobs may have drifted upwards, and

• there may be leap-frogging to catch up with pay rates elsewhere in the

company, or outside.

Grading grievances

Frequent grievances or disputes over grading or pay may indicate that the
existing grading structure is no longer appropriate. If unresolved, such
dissatisfaction could result in consequential pay claims, the gradual erosion
of differentials between grades, increased costs and deteriorating morale and
industrial relations. A job evaluation scheme, properly designed and installed
with an appeals procedure, can help maintain the credibility and acceptability
of a grading structure.

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Technological and organisational change

It is important to ensure that the grading system is appropriate to the needs

of an organisation particularly following technological and organisational
change. Changes arising from new technology may affect jobs in the
following ways:

• employees may no longer have control over the quality and quantity of
their output where the machine dictates the pace

• mental effort may replace physical effort as an important factor for

improving output

• working conditions may change to reflect the new technological process

• employees may be required to do a number of activities previously carried

out by others, and

• innovative and creative skills may be required which hitherto were not
within the culture of the organisation.

The introduction of flexibility, multi-skilling, team working and new

operational methods also have important consequences for job design and
the way jobs are organised, and will clearly affect traditional work groupings
and pay structures. A further, important advantage of some job evaluation
schemes is that new jobs can be more easily fitted into the existing
structure.

Other benefits
Some job evaluation techniques require the analysis and description of jobs
leading to a more detailed and accurate knowledge of their content. This in
turn may prompt:

• an opportunity to review roles and policies on selection and training

• improved Human Resource Management through a greater understanding

of the skills and training needed for particular jobs, and

• a review of the organisation’s structure and working methods, better

designed jobs and the identification of poor working conditions and job
hazards.

Furthermore, when both employer, employees and their representatives have

been jointly involved in a job evaluation exercise, this usually leads to
improved understanding, greater trust and better industrial relations.

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Considerations to bear in mind

Key Points: –

ƒ It is best to research the subject beforehand and if necessary seek

expert advice

ƒ Simple job evaluation techniques acceptable to both parties can be

just as effective as complex ones

ƒ Analytical job evaluation can provide a rational basis for a grading

structure consistent with equal pay for work of equal value principles

ƒ Job evaluation requires investment in time and effort and is most

effective as a joint exercise

ƒ An important consideration is the time scale for the development and

introduction of a scheme and the best means of communicating
progress

ƒ The composition of any job evaluation committee should take account

of the range of jobs covered by the exercise

ƒ Before the exercise starts, there should be a policy on whether to

protect existing pay

ƒ There may be a need to set up a joint steering committee in addition

to a job evaluation committee

Job evaluation does not replace the need for collective bargaining on pay and
conditions nor does it determine wage levels. An analytical scheme can give
a reasoned, defensible basis for a fair payment system if challenged by an
equal value claim. In deciding whether or not to introduce or revise a job
evaluation scheme, organisations should consider what practical benefits
they expect from the exercise. It is also useful to ask what would operate in
its absence.

False starts with job evaluation schemes can be expensive and damaging to
industrial relations. Organisations should therefore consider a number of
factors when deciding to introduce or revise a job evaluation scheme.

Job evaluation techniques

Simple techniques can produce basic grading structures, acceptable to both

sides. It does not follow that complex schemes are better or necessary. What

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is important is that the technique should suit the needs of the organisation
and have credibility with the workforce. Many organisations may wish to
adopt an analytical points rating scheme on the basis that only such schemes
are likely to provide a successful defence against a charge of sex
discrimination.

Job descriptions

It should be borne in mind that job evaluation may necessitate organisations

recruiting or training a job analyst to prepare an accurate analysis of the jobs
and to write the job descriptions. This will be necessary as a basis for the job
evaluation exercise. One approach is to ask job holders to complete a
questionnaire with comment and counter-signature by the line manager.
These can then be used by the job analyst to prepare job descriptions.

It may be necessary to appoint more than one job analyst to undertake the
preparation of job descriptions. Depending upon the size of the scheme, the
industrial relations background, the nature of the jobs to be covered and the
expertise and finances available, the preparation of job descriptions may be
given to someone suitably trained or experienced within the organisation.
Alternatively, a job analyst from outside the organisation may need to be
appointed. It is important that job descriptions:

• are written to a standard format to enable valid comparisons to be made

• are complete and take account of all major tasks and/or responsibilities

• are suitable in style and content for use in more than one section or
department

• cover the range of factors chosen for a job, and

• are checked and agreed by the job holder and the job holder’s manager.

Obtaining advice

When an organisation decides to introduce job evaluation, care is needed to

ensure that there is no discrimination, direct or implied, in the design and
operation of the scheme.

Some management consultants specialise in job evaluation, and provide

continuing support following a scheme’s introduction. Where consultants are
used, it is important to try to obtain workforce acceptance in advance,
especially where trade unions exist. Companies should therefore seek to
involve trade union representatives in the choice of consultant. If the scheme
is not developed in a participative way, this could lead to a greater level of

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trade union suspicion and less employee commitment to the results. It is also
essential to ensure that a senior person in the company is involved with the
project so that an understanding of the underlying philosophy does not
depart with the consultant. Should understanding of a scheme fade when the
consultant leaves, resultant problems will be more difficult to resolve.

Time and resources needed

Job evaluation requires commitment in time and effort. The length of time
from introduction to operation will vary depending on the complexity of the
scheme and the size of the job population. It is best to undertake the job
evaluation exercise within an agreed time-scale so that:

• wherever practicable it does not interfere with the planned pay negotiations

• there is sufficient time to deal with appeals and where trade unions are
recognised, to establish an agreed pay structure as a basis for subsequent
collective bargaining, and

• any additional finance to remedy anomalies in a grading structure can be

budgeted for.

Joint participation

Job evaluation is most effective as a participative exercise and this in itself

can improve employment relations. It is therefore recommended that job
evaluation is introduced or revised jointly by allowing management and
employee representatives to discuss relevant issues initially in a non-
negotiating forum.

This is because:

• a joint approach is more likely to commit both parties to the outcome of

the exercise with jointly recommended proposals more likely to be accepted
during the consequent negotiations

• employee representatives generally welcome the opportunity to participate

jointly at the formative stages of an important issue

• a joint forum will generate more ideas and recommendations than might be
expected in a more formal negotiating meeting

• a jointly agreed job evaluation scheme can remove emotion from grading
queries by allowing reasoning, rather than confrontation, to prevail, and

• in the event of an equal value claim, a jointly agreed

analytical scheme is more likely to be regarded as fair by an employment

Copyright © 2003 Department of Employment Relations – Cayman Islands Government

tribunal.

Steering committee

Some organisations may find it useful to separate policy issues from the
actual evaluation of the jobs. In these circumstances a joint steering
committee to consider policy matters and to oversee the exercise generally
may be set up in addition to a job evaluation committee.

Job evaluation committee

Organisations should be aware that the success of a job evaluation exercise

is dependent primarily on the level of commitment of management and the
appropriate trade union or employee representatives. It is important to
establish a job evaluation committee, agree its terms of reference and to
decide whether the scheme will be analytical or non analytical.

The composition of the joint job evaluation committee should take full
account of the interests of all groups of employees including women and
ethnic minorities, covered by the evaluation project. It would be impractical
to have every occupational interest directly represented but it is important
that members of the job evaluation committee possess as much knowledge
as possible of the range of jobs involved. It is, however, counter-productive if
the job evaluation committee is so large as to be unwieldy. Nor is it
necessary for management and employees to be represented in equal
numbers since the joint committee is not a negotiating body but rather a
problem solving team. The optimum number on the committee is normally
six to eight people plus the chair-holder.

A record should be kept of the decisions of the job evaluation committee and
any other appropriate information. This will be needed when the manual to
implement the scheme is produced.

Communications
Job evaluation will involve change, even though the change may only affect
some jobs. Commitment to change will be essential, with both management
and employee representatives agreeing from the outset that they will act
upon the results.

Before starting a job evaluation exercise, there needs to be agreement on

the best means of regularly reporting progress. This is especially important if
the exercise is to be a large or long one, or involving employees in several
locations. One method is to issue regular joint bulletins. All employees
affected by the proposed evaluation should be kept informed of what is
happening. Middle management and supervisors should not be by-passed.
They have a role to play in contributing to the exercise and must be able to
answer appropriate questions from employees.

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Protection of existing pay rates

Job evaluation may result in some existing employees’ jobs being placed in a
lower grade which does not equate with their current pay rate. It is
recommended that a policy on how to deal with such situations should be
considered and, if possible, agreement reached before embarking on job
evaluation. Where it is decided that in such situations the current wage for
existing employees will be retained, this process is known as ‘red circling’.

What kind of job evaluation scheme?

Key Points: –

ƒ There are a number of different job evaluation techniques but in broad

terms only two types of scheme – analytical or non analytical

ƒ The choice of a proprietary scheme or of a ‘tailor made’ one designed

in-house depends on the needs of the organisation

ƒ A ‘tailor made’ scheme involving joint participation is likely to be more

acceptable to the workforce

There are a number of different job evaluation techniques, each with

advantages and disadvantages but there are only two types of scheme,
analytical and non analytical. The most common job evaluation techniques,
within these headings are listed below.

Non analytical

Job ranking

This is a technique using job descriptions or job titles. Each job is considered
as a whole and placed in a ‘felt fair’ rank order to produce a league table. It
is considered the simplest method since there is no attempt to break down or
analyse the whole job in any way. It is therefore easy to understand and
implement, particularly with a small number of jobs.

Paired comparisons

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This is also a relatively simple technique. Each job is compared as a whole
with each other job in turn, and points (0, 1 or 2) awarded according to
whether its overall importance is judged to be less than, equal to, or more
than the other jobs. Points awarded for each job are then totalled and a rank
order produced. This method has all the advantages of job ranking and is
slightly more systematic. However, it is best limited to organisations with a
maximum of 30 jobs in a particular job population and, like job ranking, it
does not involve any analysis of jobs nor indicate the extent of difference
between them.

Job classification

This is also a ‘whole job’ evaluation technique. In job classification the

number of grades is decided first and detailed grade definitions produced.
Representative (benchmark) jobs are evaluated to validate the definitions.
Other non-benchmark jobs are then slotted in on the basis of the relevant
grade definitions. This method may be used where groups of jobs can be
clearly defined – for example, clerical and administrative employees. Again it
is easy to understand and does allow for some consideration of skill content.
There is, however, a temptation to grade jobs according to how they have
been paid historically rather than according to their definitions, and aspects
of individual jobs may straddle job definitions.

Note: The job evaluation techniques mentioned above may have a limited
appeal to organisations because, being non analytical, they are unlikely to
succeed as a defence to an equal value claim.

Analytical

Points rating

This is a commonly used job evaluation technique. It is an analytical method

which breaks down each job into a number of factors; for example, skill,
responsibility and effort, with the factors sometimes being further broken
down into sub-factors, for example, education, decision making and
dexterity. These sub-factors will be further divided into degrees or levels.
Points are awarded for each factor according to a predetermined scale and
the total points decide a job’s place in the ranking order. The factors should
reflect the varying degrees of importance attached to them. Care must be
taken to ensure that the weightings do not result in a sex-biased scheme –
for example, by attaching an unjustified weighting to the physical strength
factor at the expense of manual dexterity.

A points rating scheme has the following advantages:

• it provides a rationale why jobs are ranked differently

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• it may be entered as a defence to an equal value claim when factors are
selected and weighted to take no account of sex, and

• it will be seen generally as less subjective than non analytical techniques.

The limitations of points rating are that it is time consuming to introduce and
can be complex and costly to undertake. In addition it can be seen to be
inflexible in times of rapid change and can imply an arithmetical precision
which is not justified.

‘Tailor made’ or ‘off the peg’

A prime consideration in deciding which analytical job evaluation scheme to

select lies in the choice of factors and weightings. The benefit of proprietary
‘off the peg’ schemes is that they normally have been well tried and tested
and there is therefore a saving in time. In addition, many are linked to
mechanisms for checking salary levels. The benefit of ‘tailor made’ schemes
is that the factors and definitions more accurately reflect the range of jobs to
be evaluated and are arrived at through consensus; consequently they are
more likely to be acceptable to the workforce. Care, however, has to be
taken in designing the scheme and in particular in avoiding discrimination
when weighting the factors.

Implementing the job evaluation scheme

Key Points: –

ƒ The validation of the factor plan against benchmark jobs is essential

before evaluating all other jobs

ƒ An appeals procedure based on the agreed factor plan and or job

description should be established

ƒ The scheme should be fully documented and a manual produced to

facilitate proper maintenance

ƒ There should be a mechanism for evaluating new jobs or changes in

jobs

Preparation of factor plan for analytical schemes

When a points rating scheme is used, the factors, sub factors, and levels for
the range of jobs should be defined and listed. This is commonly known as a
factor plan.

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Validating the factor plan

Before using the factor plan, the definitions, weightings and points allocated
should be tested against benchmark jobs. These are jobs generally
recognisable by the job population as representative of the spread of work to
be evaluated. The benchmark jobs are placed in an agreed rank order which
is the basis for testing the factor plan.

The test should be carried out by the job evaluation committee examining
each benchmark job and considering each factor and the total points
awarded. In this way it should be possible to check whether consistency has
been maintained and whether the points allocated can be justified. If
necessary the job evaluation committee should be prepared to redefine and
adjust weightings at this stage.

Evaluating remaining jobs

Once the factor plan has been tested, all other jobs should be evaluated and
put in rank order. The job evaluation committee should then agree the rank
order of jobs from which a grading structure can be prepared, and
recommend it to the appropriate joint negotiating forum.

Implementation

If the job evaluation exercise has been carried out carefully and in a
participative way, it is more likely that its outcome will be accepted. The next
stage is for the organisation to decide how to implement the conclusions,
prepare a grading structure, communicate this to employees and deal with
any appeals. The grading structure should be agreed by negotiation and
should establish the number of grades, the span of points for each grade and
the related pay ranges.

‘Red circling’

At the outset of the job evaluation exercise, a decision should have been
made on whether to protect the wages of those employees whose new pay
rates might be lower than the rates they are currently receiving. This process
of ‘red circling’ involves allowing such employees to retain current wage rates
for an agreed period.

Dealing with appeals

No matter how carefully the job evaluation exercise has been undertaken,
there may be individual employees who consider that their job has been

Copyright © 2003 Department of Employment Relations – Cayman Islands Government

wrongly evaluated. A procedure for hearing appeals should therefore be
established before publication of the initial results, and appeals should be
heard on the basis of the agreed job description. Appeals should be made
within a set time-scale and may be considered in the first instance by the
original job evaluation committee.

Although each organisation should decide its own appeals procedure, it is

suggested that appeals should be:

• based on the agreed factor plan and/or job description

• dealt with separately and not under the organisation’s normal grievance
procedure, and

• received and heard within an agreed time-scale.

Maintenance
Job evaluation is not a once and for all exercise and procedures must be devised
to keep the scheme up to date. It is essential for someone in the organisation to
have a continuing knowledge of the scheme. If the scheme is not regularly
maintained, the initial problems which gave rise to the need for job evaluation
may re-emerge and the scheme will fall into decay and disrepute. If maintenance
is carried out, the scheme will last longer and should continue to be acceptable.
A prerequisite for setting up a maintenance programme is the provision of a
written job evaluation manual which sets out the background and history, rules
and results of the scheme, allocation of responsibility and details of how the
scheme will be kept up to date.

It is the Department of Employment Relations experience that the ongoing

maintenance of a scheme requires that:

• responsibility for the scheme is clearly allocated

• job descriptions are prepared for new or altered jobs

• a programme for carrying out those reviews should be considered in advance,

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and

• replacement committee members are identified and trained.

Re-evaluation of jobs

There should be a separate procedure for dealing with the evaluation of new jobs
or the re-evaluation of an existing job which has changed. The following
procedure is suggested:

• the employee should apply to his or her immediate line manager, using a
standard form which sets out the reasons why the grading is not, or no longer,
thought appropriate

• the line manager, after discussion with the employee as necessary, should
submit the application to the Personnel Department, indicating whether or not it is
supported

• the Personnel Department should arrange for a current updated job description
to be prepared and agreed by the employee and line manager, and

• the joint evaluation committee should consider the job description and give its
decision within an agreed time-scale.

Copyright © 2003 Department of Employment Relations – Cayman Islands Government